Why break things up into smaller (restrict the) numbers of hosts?
Sometimes you need to isolate computer groups for better network performance
(have the computers that talk to each other the most off in a corner where
they won't disturb anyone else), security (limit the damage that a vandal can
cause), or because it makes troubleshooting easier (limit the number of
variables).
If nothing else, restricting the number of hosts (subnetting) is done for
organizational or topological reasons, coupled with the fact that there
are a limited number of IP#'s out there, and the numbers are assigned in
blocks usually, which is why things are broken up in contigous, consecutive
numbers.
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